Ex-Louis Berger Execs Cop to Bribery Scheme

NEWARK, N.J. – A construction-management firm reached a $17.1 million settlement Friday of Justice Department charges that it bribed foreign officials in southeast Asia. Pursuant to a deferred prosecution agreement, Louis Berger International, of New Jersey, admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. In addition to paying a $17.1 million criminal penalty, the settlement requires LBI “to implement rigorous internal controls, to continue to cooperate fully with the department and to retain a compliance monitor for at least three years,” according to statement from the Justice Department. Pointing to the company’s admissions and statements in the charging documents, the Feds say that LBI and its employees “orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts” from 1998 through 2010. “To conceal the payments, the co-conspirators made payments under the guise of ‘commitment fees,’ ‘counterpart per diems,’ and other payments to third-party vendors,” the DOJ statement about the settlement states. “In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts.” The Justice Department notes that foreign officials in India, Indonesia, Vietnam and Kuwait accepted the bribes to secure government construction-management contracts for LBI. Two former LBI executives also pleaded guilty to conspiracy and FCPA charges in connection with the scheme. The Justice Department names these individuals as Richard Hirsch, 61, of Makaati, Philippines, and James McClung, 59, of Dubai, United Arab Emirates. “Hirsch previously served as the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam,” according to the DOJ statement. “McClung previously served as the senior vice president responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam.” Hirsch and McClung’s sentencing hearings are scheduled for Nov. 5. The government notes that the deferred prosecution takes “LBI’s self-reporting of the misconduct” into account. LBI also cooperated by “voluntarily making both U.S. and foreign employees available for interviews, and collecting, analyzing and organizing evidence and information for federal investigators,” the Justice Department added. Extensive remediation includes LBI’s termination of the officers and employees responsible for the corrupt payments, and a commitment to compliance and improving internal controls. Though the Justice Department press release on the settlement is dated July 17, its copies of the federal complaint and deferred prosecution agreement are dated July 7.